“Interest Rates Take a Chunk Out of Home-Seller Profits: 4% in Losses”
Quick Summary
In the last three months of 2021, 4% of homes sold for less than the seller originally paid. This was highest in Auckland, at almost 7%. Hamilton had the biggest increase in loss-making sales, with more than 6% selling at a loss. Christchurch had the lowest proportion of loss-making sales, at 1.5%. Across the country, the median amount lost was $45,000. Apartment owners fared worse, with a quarter of those sold in the quarter losing money and the average lost was $52,750. Ray White is marketing a three-bedroom house in an affluent central Auckland suburb as a lifestyle opportunity for young first home buyers, but with a catch. These figures suggest that rising interest rates have had an effect on some homeowners, and other factors such as divorce or death can also drive unexpectedly short hold periods.
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ROB STOCK/Stuff
Houses were more likely to be sold for a profit than apartments were.
About 4% of home sold in the last three months of last year changed hands for less than the seller originally paid, new CoreLogic data shows.
Those properties that sold at a loss had only been held for 19 months, on average.
CoreLogic chief property economist Kelvin Davidson said that indicated that rising interest rates were having an effect on some homeowners.
“A change in an owner’s financial situation could be behind a short hold period – and at the moment, rising interest rates would be a clear candidate for driving some of these sales. At the same time, other factors such as divorce or death can also drive unexpectedly short hold periods,” he said.
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The percentage of loss-making sales increased from 3.1% the previous quarter. The rate was highest in Auckland, at almost 7% in the quarter.
Hamilton had the biggest increase in loss-making sales – there, more than 6% sold at a loss, double the percentage of the previous quarter.
Christchurch had the lowest proportion of loss-making sales of any big center, at 1.5% in the quarter.
Across the country, the median amount lost by those who lost money was $45,000.
Apartment owners fared worse. A quarter of those sold in the last quarter of 2022 lost money, and the average lost was $52,750. Only 3.3% of houses were sold for a loss, by comparison.
Ray White
A three-bedroom house in an affluent central Auckland suburb complete with pool, spa and outdoor bar is being marketed as lifestyle opportunity for young first home buyers, but there’s a catch.
“Apartments are a small segment of the overall property market, but they’re clearly a property type worth keeping an eye on over the next…
